Introduction

This chapter will introduce the financial topics that affect the viability of large-scale solar power system programs. Like any other capital investment projects, the proper appreciation of financial issues associated with large-scale solar power projects becomes a prerequisite for justifying a project. As such, the overall financial assessment becomes as important as designing the system. The rebate and tariff programs discussed below reflect the specifics of California's programs, which have set the standards for the United States. Therefore, readers are advised to inquire about the status of the programs that prevail in other states.

California Solar Initiative Rebate Program

This chapter is a summary of the California Solar Incentive (CSI) and Feed-In Tariff programs, which are essential to understand when dealing with large-scale solar power systems. It should be noted that the California Energy Commission (CEC) has developed all regulatory policy and solar power system equipment certification standards that have been used throughout the United States and abroad. The CSI and feed-in tariffs discussed in this chapter are applicable to all states within the country.

On January 1, 2007, the State of California introduced solar rebate funding for the installation of photovoltaic power cogeneration, which was authorized by the California Public Utilities Commission (CPUC) and the California Senate. The bill, referenced as SB1, has allotted a budget of $2.167 billion, which will be used over a ten-year period.

The rebate funding program known as the California Solar Initiative (CSI) is a program that awards incentive plans on the basis of performance, unlike earlier programs that allotted rebates based on calculated projections of system energy output. The new rebate award system categorizes solar power installations into two incentive groups. An incentive program referred to as the Performance-Based Incentive (PBI) addresses photovoltaic installation of 100 kilowatts or larger and provides rebate dollars based on the solar power cogeneration's actual output over a five-year period. Another rebate referred to as Expected Performance-Based Buydown (EPBB) is a one-time lump sum incentive payment program for solar power systems with performance capacities of less than 100 kilowatts. This is a payment based on the system's expected future performance.

The distribution and administration of the CSI funds are delegated through three major utility providers, which service various state territories.